Friday, August 1, 2014

Cohongs: Domination of Trade

China’s rulers were anxious
about the proselytizing of the Christians in its ports. In the mid 1700’s, the
Manchu Qing government decreed that all foreign trade of China would only pass
to the ports of the southern city of Canton. And in Canton, only few were
allowed to transact with the outsiders. Those who were only allowed to mingle
with the western traders were called Cohongs (Kohongs or simply Hongs). They
would serve as intermediary between Beijing and the Europeans.

China was the golden goose
for many western traders. Many were willing to invest large amount of capital
just to have a journey to trade with China. Exotic and oriental goods from
China valued highly in the markets of Europe. Nations launched expeditions to
find new routes to get to the Middle Kingdom. The British, French, Spanish, and
Dutch were just among those who sought trade with China.

China, however, were
hesitant of the foreigners. They deemed them lowly and dangerously. Their trade
activity caused them to be seen as low class by the Chinese. On the Confucian
social strata, traders were on the lowest part. Furthermore, the Chinese also
saw them as threat to their identity and traditions. The Christian missionaries
brought by the Europeans became the reason for many of the Chinese converts to
turn away from the old tradition of ancestral worship. Moreover, it also drove
away Chinese converts away from traditional festivities. The government saw
this as well and decided to act against them.

They decided to isolate the
whole Empire with one port only open to the foreigners. During the reign of
Emperor Kangxi, the foreigners were only allowed to the coastlines of the
Empire. But when the new Emperor came to power it changed. Emperor Qianlong
limited all foreign trade activity only to the port of Canton. And there, the
business of the foreigners were further limited.The government limited
business transaction to a number of groups of merchants called Cohongs. Cohongs
were an organization of merchants specialized in trading with the Europeans.
The Cohongs meant authorized firms in Cantonese. But in Mandarin Pinyin
Romanization, they were known as Gohangs. The Cohangs began in 1720 during the
reign of Emperor Yongzheng. During the start of the Canton System under the
reign of Emperor Qianlong, there thirteen permitted Cohongs. The Cohongs may
increase in number depending on profitability. In 1720, there were 16 Cohongs
operating. No merchants outside the cohongs were allowed to do business with
the foreigners. The Cohongs had the virtual monopoly. In order for a cohong to
join, they must pay a thousand taels. The most prominent cohongs were the
following: Mowqua, Puankhequa, Goqua, Futqua, Kingqua, Sunshing,
Mingqua, Saoqua, Punhoqua, Howqua. The most prominent and richest of all was
Howqua. He began his Cohong in mid-1700s and continued until its end in 1842.

The Cohongs were given a
huge responsibility by the Chinese government. They served as representatives
of the Qing government to the foreign merchants. They were to police them and
make sure they act according to the law of the land. They were also responsible
in collecting customs duties from the incoming foreign ships. And these taxes
were to be remitted to the officials directly appointed from Beijing known as
Hoppo.

The Cohongs were also to
entertain the foreign traders. They rent them the Thirteen Factories. The
Factories or malfactories were to serve as temporary offices of foreign agents
during the trading season, which was between September and March. They had the
privilege to buy and sell goods to the Europeans. Porcelain, lacquerware,
camphor wood, and many more Chinese goods were being sold to the outsiders.

The Cohongs faced many
problems during their operations. In 1771, they were disbanded for charges of
tax evasion. And so the foreign traders began to operate and borrow money
directly from Chinese traders. The government wanted to discontinue and
prohibit it and so the cohongs were reinstated in 1782. In 1793, the Macartney
Embassy wished to end the monopoly of the cohongs along with the Canton System.
Emperor Qianlong, however, denied their request.

The British did not lose
hope to open up China and find new markets for their goods. By the 1830’s
Britain had found a way to increase their exports to China. They found opium to
be very popular and profitable in China. But the opium addiction in China
alarmed the Qing government and Emperor Daoguang was made to act. Lin Zexu was
appointed to halt the destructive trade in Canton. Lin blamed the Cohongs for
the spread of such dangerous drugs. And so he threatened to execute some Cohong
if they failed to comply with the government. They had no choice but to
surrender their opium. It eventually led to the Opium War in 1839. And in 1842,
the Qing was humiliatingly defeated. It then signed an unequal treaty with
Britain opening up 11 ports for trade. It ended the monopoly of both Canton and
the Cohongs.

The cohongs was similar to
the Canton System. It was meant to isolate and contain the foreigners from
spreading their influence in China. They made sure that the foreigners were
only in Canton and made sure as well that they would not mingle with other
Chinese merchant. However, there business mindedness caused their downfall.
With high profits from opium, they spearheaded the addiction of millions of Chinese
for generations. Eventually, the same opium they helped to import led to a war
that would end their dominance in the export and import trade in China.See also:Canton SystemDejima IslandThirteen FactoriesBibliography:Carroll, J. A Concise History of Hong Kong. Maryland: Rowman & LIttlefield Publishing, Inc., 2007.Dillon, M. China: A Modern History. New York: I. B. Tarius & Co. Ltd., 2012.Dillon, M. Dictionary of Chinese History. New Jersey: Frank Cass and Company Ltd., 1979.Gao, J. Historical Dictionary of Modern China. Maryland: Scarecrow Press Inc., 2009.